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New GTAA chief sees traffic flying high at Toronto's Pearson

Howard Eng is the Greater Toronto Airports Authority's new chief executive officer.

Kevin Van Paassen/Kevin Van Paassen/The Globe and Mail

The new head of Toronto's Pearson International Airport sees the stars aligning for Canada's airline industry – at least when it comes to gaining more passengers.

As Air Canada and WestJet Airlines Ltd. expand, Pearson stands to benefit as a major geographic hub for passengers connecting to other destinations, said Howard Eng, chief executive officer of the Greater Toronto Airports Authority, which oversees Pearson.

Connecting passengers account for 27 per cent of traffic at Canada's largest airport. It's realistic to raise that to one-third, the new CEO believes.

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It will take several years, but Pearson is capable of sharply raising its North American profile, said Mr. Eng, a Canadian who worked at Hong Kong International Airport from 1995 until this spring.

Noting the Hong Kong air terminal's importance as a jumping-off point in Asia, he said Pearson is positioned to improve its stature in North America.

Part of Mr. Eng's optimism stems from Air Canada's plans to start taking delivery of Boeing 787 Dreamliners in 2014, allowing the airline to add new foreign destinations to its route network.

The fuel-efficient, long-haul Dreamliner could also be deployed by some foreign carriers to and from Pearson.

"Before, there was a technology hurdle, but now the hurdle is gone," he said in advance of a busy week in the aviation sector.

How much the airlines are reaping from passenger revenue – and at what price per available seat mile – will be revealed. WestJet Airlines Ltd. will announce its first-quarter results on Tuesday, the GTAA will hold its annual meeting on Wednesday and Air Canada will release its quarterly statements on Friday.

The aviation industry has proven to be resilient, recovering after the 2008-09 recession. Last year, Pearson handled a record 33.4 million passengers, up from 31.9 million in 2010. But that hasn't always translated into rising profits for the two big airlines, thanks to high oil prices and competition on some routes from competitors such as Porter Airlines Inc.

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Analysts are expecting Air Canada to report a loss of 79 cents a share, according to Bloomberg, compared with 45 cents a year ago. (The airline typically loses money in the first quarter.)

WestJet, meanwhile, is expected to clock in a first-quarter profit of 37 cents a share, up from 34 cents.

WestJet plans to launch a short-haul regional airline by late 2013, purchasing turboprops to fly travellers from smaller cities to major airports.

At Pearson, Mr. Eng, 59, is welcoming the Ontario government's plans for a new express rail link, to be ready in 2015, between the airport and Union Station in downtown Toronto.

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